Correlation Between Republic Bancorp and WSFS Financial

Can any of the company-specific risk be diversified away by investing in both Republic Bancorp and WSFS Financial at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Republic Bancorp and WSFS Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Republic Bancorp and WSFS Financial, you can compare the effects of market volatilities on Republic Bancorp and WSFS Financial and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Republic Bancorp with a short position of WSFS Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Republic Bancorp and WSFS Financial.

Diversification Opportunities for Republic Bancorp and WSFS Financial

0.9

Correlation Coefficient

Republic Bancorp  WSFS Financial

Almost no diversification

The 3 months correlation between Republic and WSFS is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding Republic Bancorp and WSFS Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on WSFS Financial and Republic Bancorp is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Republic Bancorp are associated (or correlated) with WSFS Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of WSFS Financial has no effect on the direction of Republic Bancorp i.e., Republic Bancorp and WSFS Financial go up and down completely randomly.

Pair Corralation between Republic Bancorp and WSFS Financial

Assuming the 90 days horizon Republic Bancorp is expected to under-perform the WSFS Financial. But the stock apears to be less risky and, when comparing its historical volatility, Republic Bancorp is 1.01 times less risky than WSFS Financial. The stock trades about -0.06 of its potential returns per unit of risk. The WSFS Financial is currently generating about -0.02 of returns per unit of risk over similar time horizon. If you would invest  5,476  in WSFS Financial on May 11, 2025 and sell it today you would lose (129.00) from holding WSFS Financial or give up 2.36% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Strong
Accuracy	100.0%
Values	Daily Returns

Republic Bancorp  vs.  WSFS Financial

Republic Bancorp

Risk-Adjusted Performance

Weakest

Over the last 90 days Republic Bancorp has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Republic Bancorp is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

WSFS Financial

Risk-Adjusted Performance

Weakest

Over the last 90 days WSFS Financial has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable technical and fundamental indicators, WSFS Financial is not utilizing all of its potentials. The latest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Republic Bancorp and WSFS Financial

The main advantage of trading using opposite Republic Bancorp and WSFS Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Republic Bancorp position performs unexpectedly, WSFS Financial can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in WSFS Financial will offset losses from the drop in WSFS Financial's long position.

The idea behind Republic Bancorp and WSFS Financial pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.